In September 2023 the Insolvency Service released its response to the consultation on the future of insolvency regulation which set out the government’s intentions on changes to legislation. We set out what we currently know about the intended changes.
The consultation response set out that the government intends to legislate for the following when Parliamentary time allows:
- a framework that includes a basic set of qualifying principles for the statutory authorisation and regulation of all firms (other than sole trader Insolvency Practitioners) to sit alongside the authorisation and regulation of individual Insolvency Practitioners (IPs)
- a prohibition on firms offering insolvency services unless they are properly authorised
- a requirement for each authorised firm to appoint a senior responsible person, who will be registered as such with the firm’s regulatory body
- an appropriate sanctioning mechanism
- the facility to recover proportionate costs of regulation from regulated firms
In advance of legislation, the Insolvency Service said it would work with the recognised professional bodies to assess what steps towards firm accountability can be taken within the parameters of the current framework.
We know IPs and firms are very keen to know more about the Insolvency Service’s proposals for firm regulation, the direction of travel and the timing. The Insolvency Service team is still working hard on its proposals and has held a number of meetings with stakeholders, but as yet there is nothing firm we can share with IPs. As soon as we have further information, we will update IPs via Regulation and Conduct News.
